Cruise lines take a hard line on refunds

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Tragedy struck just as Ira Birnbaum and his wife prepared to set sail along Alaska’s scenic Inside Passage on Norwegian Cruise Line.

“The day before we were scheduled to fly to Seattle to board the cruise, I got word that my mother was gravely ill and placed in hospice,” recalls Birnbaum, who works for the federal government and lives in Annandale, Va. “The following day, the day of our scheduled cruise departure, she died.”

When Birnbaum told United Airlines about his mother’s sudden passing, it offered him its condolences and a credit for a future flight. It also waived his ticket-change fee. But when he informed his cruise line, it wasn’t so generous.

“NCL refused to give me a refund, other than port taxes,” he says. “They wouldn’t even offer a credit toward a future cruise. I called back several times in efforts to get more reasonable customer service representatives or speak to a supervisor, and I wasn’t even allowed to speak to a supervisor. Needless to say, I was stunned by their callous, insensitive attitude and outraged by their disgusting policy.”

You’d assume that a cruise line would either refund a fare or offer a credit when there’s a death in the family. Not necessarily. Some companies maintain strict no-refund rules, while other cruise lines claim to be more compassionate. But it’s almost impossible to know how strict — or compassionate — until the unthinkable happens and a close relative dies before you’re scheduled to set sail.

AnneMarie Mathews, a spokeswoman for NCL, said that refund requests are reviewed on a “case by case” basis, but that the company’s refund rules are clear: Any cancellations made within 14 days or less of the sailing date are subject to a 100 percent cancellation fee. A request for an exception must be made to the company in writing. “In the instance of Mr. Birnbaum, we are very sorry for his loss,” she said. “However, we have not received a written request from him.”

Birnbaum says that the cruise line never informed him of its refund procedure.

Although each cruise line handles credits or refunds in its own way, they do have uniform paperwork requirements, according to Michael McGarry, a spokesman for Cruise Lines International Association, an industry trade organization. “A passenger who can’t make a cruise because of a family emergency should always notify the line and insurer of the cancellation in writing, explain the circumstances, and provide any supporting information, such as a death certificate.”

But beneath the surface, there are forces at work that a traveler doesn’t see. Sales of insurance and vacation “protection” are thought to be a significant and growing portion of a cruise line’s revenue. In last year’s annual report, NCL didn’t break out its earnings from insurance sales, instead reporting $754 million in onboard and “other” revenue, an $82 million increase from a year before. That’s a little less than half the $1.8 billion in ticket revenue it reported in 2013.

Mathews says that NCL “strongly” encourages its customers to buy insurance “so that they will be covered” if there’s a death in the family before a cruise.

To prod customers into buying pricey insurance, it benefits cruise lines to take a hard line on refunds — harder even than that of airlines, known for having some of the travel industry’s least forgiving refund rules. It should come as no surprise, then, that some of the most intractable cases I’ve handled in the recent past involve uninsured passengers and intransigent cruise lines.

“Birnbaum’s case is an easy call,” says James Walker, a maritime attorney. “The poor passenger lost his mother, for goodness’ sake.”

By adopting rigid, bureaucratic policies, companies like NCL are sinking the entire industry’s image, says Kendall Carver, chairman of the International Cruise Victims Association, a group that represents cruise passengers. “Clearly, in the long run, the failure to make any refund further hurts the image of the cruise industry, which is already hurting. It’s a shortsighted approach on their part just to make a buck. It’s my feeling that in the long run, it will only hurt them more, as individuals who have had this experience are clearly going to share their bad experiences with others.”

Birnbaum suspects that NCL is imposing a too-strict “no refunds” policy that isn’t shared by the rest of the cruise industry. His wife’s niece had to cancel a recent Royal Caribbean cruise under similar circumstances — a medical emergency involving a close relative — and the cruise line offered a full credit for a future cruise.

“We’re usually pretty compassionate when a guest experiences a death in the family and is unable to take their cruise,” says Cynthia Martinez, a Royal Caribbean spokeswoman. “We work with the guest to see what is the best course of action. We can work with them to reschedule their cruise. Sometimes we give them a credit to use on a future cruise, or they may have travel insurance that they can use. It really depends on their specific situation.”

Carnival claims that it, too, is compassionate when its passengers experience a death in the family. “We are sensitive to when guests suffer a loss of a close relative and generally accommodate their wish to reschedule or provide a full refund, if requested,” says Carnival spokeswoman Aly Bello.

Birnbaum isn’t the only NCL case involving a refund request after the death of a family member. Howard and Sharon Levin were scheduled to sail to Bermuda recently on the Norwegian Dawn ship, but just before they left, their 25-year-old son died unexpectedly. NCL at first told Sharon that she’d receive no refund and that she should have purchased insurance. Then it offered her a 25 percent discount on a future cruise, which would expire after a year.

“I don’t even want my money back at this point, but the opportunity to take a cruise with my family to help heal,” she told me. “My family has been devastated by this tragedy, and I am trying, on a daily basis, to hold everyone together.”

I contacted NCL on her behalf. Initially, it did not respond. After I told the company that I was reporting on refunds, it reviewed its records and said that the Levins had accepted its discount offer. It considered the case closed.

It’s difficult to say whether these passengers would have fared any differently on a competing cruise line, since none of the lines prominently advertise their policies on refunds in the event of a family member’s death. We do know that insurance might have saved their vacation, but also that it would have benefited the cruise line.

Perhaps these families would have been better off flying to their vacation. At least they would have received a more generous credit, if not a full refund.

Are cruise line refund policies too strict?

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at . Got a question or comment? You can post it on the new forum.

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  • ArizonaRoadWarrior

    I agree…never purchase a travel protection plan (I don’t use ‘insurance’ since it is not licensed as an insurance policy as well as regulated by the state insurance commissioners) from a travel provider (i.e. airline, cruise line, tour operator, etc.)…always purchase a travel insurance policy.

  • bodega3

    Yes and no. A major reason to buy your coverage separately is for default. However, here in the State of CA, if the vendor is registered to sell in CA and the traveler is a resident of CA, there is protection for default, besides your credit card, which is how you should always pay for your travel arrangements. With that in mind, look at what the vendors policy is with, what it covers. I just bought a vendors policy for my travel package that I purchased this past week. I got coverage for before I travel and coverage for when we are on the trip for over $300 per person LESS than what I could have paid to the travel insurance company we offer to clients. We get preexisting coverage since I took it out at the time of deposit and it has a cancel for any reason coverage.

  • ArizonaRoadWarrior

    I am glad that you were able to get a travel protection plan offered by a travel provider that was able to match every feature including the regulatory protection (i.e. Department of Insurance) of a travel insurance policy.

    First, a travel protection plan is not licensed as an insurance policy; therefore, it doesn’t come with any protection that a State Insurance Department provides…this protection is different if a state requires registration, etc. like CA. If there is a problem, a traveler could file a complaint with the state Department of Insurance where the company is headquartered and their own state as well.

    So far, I have not found a travel protection plan (even taking away the Dept of Insurance regulatory protection) that could match benefits of a travel insurance policy. Yes, a travel insurance policy costs more a travel protection plan but you get what you pay for.

    I remember when we went to Europe, we received ‘free’ a travel protection plan. My wife told me that there is no need to purchase a travel insurance policy. I told her to read the plan and after reading it, she agreed with me that it was totally worthless as the paper that it was written on.

    The biggest thing that I found fault with travel protection plans…they are written by the travel provider and these plans favor the travel provider. I read an article about an elderly traveler that purchase a travel protection plan with a ‘Cancel for Any Reason’ benefit and became ill. He couldn’t travel and his travel protection plan give him a credit for a future tour. Unfortunately, this new medical condition prevented him from traveling again; therefore, his $ 8,000 that he spent on a tour is worthless since he can’t travel nor the credit can be transferred to someone else. If he had a travel insurance policy, he would have received CASH not a credit on future travel.

  • Randy Culpepper

    And I’m the “unfeeling, insensitive” one? Death is a part of life. It isn’t corporations’ responsibility to bear the cost of that.

  • bodega3

    Yes, you need to compare and decide which is best for you and for the state you live in. Default is a major consideration as a tour company can not offer insurance for this against themselves. Our last trip we took out coverage from the travel insurance company my agency sells. I am less concerned about getting my money back as I am about something happening while on vacation so I want medical, emergency evac, and repatriation.

  • ArizonaRoadWarrior

    My parents and mother-in-law were not in good health in the last five years of their lives respectively. It was one of the reasons why we purchased travel insurance in case if we had to leave a cruise, tour, etc. early, etc. My mother-in-law had multiple strokes and went into a coma while we were on a tour. Things do happen and that is why there is insurance…to protect the risks that you are not willing to assume.

    If you can afford to go on a cruise then you can afford travel insurance. If you can’t afford it then assume the risks and take the lumps if they occur OR don’t go. We (the USA) are becoming a nation of people that don’t want to take responsibility for our actions or lack of actions. We want someone to bail us out every time for the poor choices that we made.

  • ArizonaRoadWarrior

    I disagree that people are not so informed about protecting themselves. I think that it falls into two categories: 1) don’t think that something will happen and 2) if it does happen, expect someone else to pay.

    It is like people that purchase homes in a flood zone but don’t buy flood insurance then expect the government to bail them out if they lose their home in a flood. Can’t afford flood insurance than don’t buy a house in a flood zone.

  • ArizonaRoadWarrior

    I agree with you that Chris should save his very valuable time, resources and ‘goodwill’ for cases where the consumertraveler did all of the right things but did not receive the product or service as promisedguaranteedetc.

  • Annie M

    If you cannot afford to lose everything you’ve paid for your vacation if an emergency arises like this, you need to buy travel insurance. Plain and simple, thats what insurance is for. Too many people book on their own and no one tells them why or what insurance covers. This is where the value of a travel agent comes in.

    And don’t think Royal Caribbean provides refunds or allow people to change dates all the time either, I’ve seen plenty of instances where they DIDN’T provide refunds or alternates dates too, so don’t make it seem like NCL is alone in adhering to rules.

    Buy travel insurance and you’ll probably never have to read another story like this in this column.

  • Annie M

    Don’t kid yourself by Royal’s reply- they have also refused refunds like this too. If you simply buy travel insurance, you’ll likely never have to worry about something like this. And use third party insurance, it’s almost always cheaper than the cruise lines.

  • Annie M

    Too many people that book their own travel usually are never told about the value of buying insurance. Book through a travel professional who can relay true stories of people who did have insurance and what it covered and you’ll realize the value of buying insurance.

  • Annie M

    We advise clients if you can’t afford to lose all your money if you can’t travel for a covered reason, you need to buy insurance. If you wouldn’t blink an eye losing everything – then you don’t need insurance.

  • Annie M

    Unless you are age 70 or above, third party insurance is almost always cheaper and has more coverage than the cruise lines insurance and gives you back your money in cash, not a credit towards a future trip. And if you buy the cruise line insurance and the cruise lines goes bankrupt, you have no coverage after all.

  • Annie M

    A better idea is just to buy travel insurance and not have to worry about anything.if you think a cruise line has time to monitor empty cabins and people that had to cancel because they were too cheap to buy insurance you are kidding yourself.

  • Vox_Rationis13

    Yeah, I’m with you here. While it would’ve been a nice “surprise” if the cruiseline gave the OP some special consideration, I certainly wouldn’t expect it or thought I was entitled to it. Sometimes life just sucks.

  • Vox_Rationis13

    Obviously, it’s not just cruising. Could apply to non-refundable flights / hotels… basically anything outside of a roadtrip and camping gear!

  • Vox_Rationis13

    Like this idea, although I’m sure people would still complain about being made to book too close to the sail date.

  • Frank Palmer

    Chris,
    He won’t be missed. With comments like has last one there is no value added.

    Adios Tony

  • Lindabator

    And depending on who they are partners with, they may offer better coverage for less than the insurance’s listed price (previously worked at a cruise-oriented agency whose TravelGuard policies were NOT dependant upon age, making it a great deal for the seniors)

  • Lindabator

    And any tour you would have booked. 24 hours prior means they have to eat the cost, so why should they when you could easily insure this?

  • Lindabator

    Untrue – had a friend who booked thru a discounter (not worth the headache), then had a death in the family. THEY chose to write the company, send in the necessary paperwork and GOT the refund from NCL. But not wanting to have to send it in writing, when that is clearly how they respond to these situations is on the OP!

  • Lindabator

    True – EVERY cruise line takes it on a case-by-case basis. And each has the RIGHT to say no.

  • Kristiana Lee

    I own my own business so I get to decide whether to bend a rule or not. I don’t know what tone he took when he talked to NCL but if he took the same tone with me that he took with Chris (“callous, insensitive attitude; disgusting policy”) I would have said no as well. I’m pretty sympathetic but he comes across as entitled.

  • bodega3

    Excellent point!

  • Daniepwils

    Here is my question. Did the cruise line then book the room last minute? How much did they make? If they made more money off of the last minute sell then reimburse the OP fully, if it was a loss, why not just reimburse what the second party paid, that way either way the cruise line makes their bottom line. It would only be fair to refund whatever amount to the original “bookie”, the OP.

  • cowboyinbrla

    Perhaps that’s the newest angle Christopher should be covering: Travel insurance companies. If the travel providers are going to be such hard-asses, maybe instead of advocating for special treatment in special cases, he could do some studies and reviews of which travel insurers offer decent coverage for the price and which ones offer junk.

  • cowboyinbrla

    Perhaps not. But a corporation has ways of mitigating their actual “cost” while doing the right thing by the customer. I doubt that every cruise sails full, so it could easily have offered the family a rebooking subject to availability on a future cruise, limiting the offered options to cruises which historically sail “not full”. The cruise line has the money up front, it has use of it long before the associated expenses, it comes off looking like the really good guys – and the net cost to them is about zero. But no – they’d rather point to a “NO REFUNDS” policy and pocket the money.

  • cowboyinbrla

    All that is true. But it’s also true that upon calling to cancel, the folks operating the phone lines could be trained to tell people that requests for refunds/credits etc. need to be submitted in writing, and here’s the address, and here’s where to find the info on our webpage. Unless, of course, you don’t WANT them to find it easily.

  • cowboyinbrla

    I noted something about this above – in fact, the cruise line could – if it wanted – create a customer for life and/or an ambassador for the line if they’d handled it right. I don’t think the 14-day window is necessary – I have an idea cruise lines know pretty well in advance how many empty cabins there will be on any cruise, on average, and could steer the customers to one of those less-full sailings. A small bouquet of flowers in the cabin with a quick note – “We hope you enjoy your rescheduled cruise, and we’re sorry for your loss that made it necessary” that someone gets the captain to sign – would have left the family thinking NCL was the best travel company in the world. But sadly, companies focused solely and relentlessly on the bottom line right this second just don’t see opportunities.

  • Annie M

    As someone who lives in a flood zone, had flood insurance and then saw FEMA give out more money to those who had absolutely NO flood insurance than those of us who are paying over $2,000 a year JUST for flood insurance – you can’t make a comparison. FEMA screwed most of us who did have flood insurance with Sandy and doled out millions to those who didn’t. Go figure the reasoning.

    Your comparison would make sense if FEMA did.